Inside Track: Commercial Litigation: Business Court Pilot Project Still Open for Business:

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  • December
    04
    2019

    Commercial Litigation: Business Court Pilot Project Still Open for Business

    Established by the Wisconsin Supreme Court in 2017, the three-year Business Court Pilot Project has resolved nearly 80 cases on a dedicated commercial docket.

    Joe Forward

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    Dec. 4, 2019 – According to Marinette County Circuit Court Judge James Morrison, the three-year Business Court Pilot Project that began in 2017 is working well and more attorneys and their business clients should take advantage of the commercial docket.

    Judge Morrison, also chief judge of the Eighth Judicial Administrative District, is one of seven circuit court judges that take cases exclusively reserved for the Commercial/Business Court docket, which promotes expertise and efficiency.

    “It has been quite successful,” said Judge Morrison. “The vast majority of lawyers have been pleased that judges with business law experience are helping to resolve these cases and moving them along quickly, understanding the economic realities involved.”

    Milwaukee business litigator Laura Brenner of Reinhart Van Deuren S.C. and her partners have used the business court to help resolve numerous commercial disputes.

    “The business court judges are more familiar with these types of cases,” Brenner said. “Their familiarity with the issues and what could be coming next, in terms of discovery or what might else may be needed, is really helpful to keep the cases moving forward.”

    Business Court Going Strong

    The Business Court Pilot Project, established by the Wisconsin Supreme Court in 2017, serves eight counties, including Brown, Door, Kewaunee, Marinette, Oconto, Outagamie, and Waupaca counties (counties within the Eighth Judicial Administrative District), as well as Waukesha County. These jurisdictions were initially selected for the pilot, in part based on their vicinity to commercial activity in the state.

    Joe Forwardorg jforward wisbar Joe Forward, Saint Louis Univ. School of Law 2010, is a legal writer for the State Bar of Wisconsin, Madison. He can be reached by org jforward wisbar email or by phone at (608) 250-6161.

    The goal of the commercial docket is to: 1) improve the quality and predictability of justice in connection with business disputes; 2) improve parties’ access to justice; 3) make repeat disputes less likely to occur due to guidance provided by ongoing decisions; and 4) making Wisconsin a desirable forum for resolving business disputes.1

    Since its inception, the Business Court has handled close to 80 cases, a majority (51 cases) in Waukesha County. More than half have already been resolved.

    Many cases (38) involve prohibited business activity, such as unfair competition, antitrust claims, or disputes concerning no-compete or confidentiality agreements.

    The next biggest category of cases involve internal disputes in business organizations, including shareholder claims, claims against officers or directors, or claims involving the interpretation of rights and obligations under agreements governing the business.

    A specific class of cases in those jurisdictions must be filed in the Business Court, but Judge Morrison said some slip through the cracks because attorneys don’t know about the Business Court, or don’t know their case qualifies for the Business Court.

    “In a perfect world, lawyers will always designate a qualifying case for the Business Court, but some lawyers may not understand the case as a business case,” he said. “Some cases aren’t filed there until a judge or clerk flags it as a Business Court case.”

    Judge Morrison hopes more lawyers learn what qualifies as a case for Business Court, and says the Business Court is open to voluntary transfers from other jurisdictions.

    That is, a qualifying case filed in Milwaukee, Dane, or some other county that is not participating in the pilot project could be transferred to the Business Court’s docket, where judges with significant business law experience can usher them through.

    Almost all cases settle, but Judge Morrison said a transferred case could be tried in the home venue – by the Business Court judge – if a case was set for trial. In other words, the Business Court judge would sit in the home venue for trial if necessary.

    Other States Embrace Commercial Docket

    Judge Michael Aprahamian is one of three judges handling the Business Court docket in Waukesha County, and they are the most active. Judge Aprahamian, along with Judge Michael Bohren and Judge William Domina, have handled 51 cases thus far.

    In a 2018 Wisconsin Lawyer article, Judge Aprahamian noted that close to 30 other states have specialized courts dedicated to complex commercial cases.

    He also noted that Wisconsin’s Business Court judges coordinate consistent practices and obtain specialized training on complex commercial cases, including training from the American College of Business Court Judges. Affiliated with the Antonin Scalia Law School at George Mason University, the American College of Business Court Judges assembles business court judges nationwide to discuss and study business law issues.

    Such training allows judges to streamline and usher complex business cases to more efficient resolutions, using their own expertise in business law matters, which allows businesses to exit the litigation cycle and fully reengage in economic activity.

    For instance, in the 41 cases closed (as of Oct. 25, 2019), 26 of them were closed within six months, and another nine within 12 months. In her State of the Judiciary Address, Chief Justice Patient Roggensack said the Business Court is very beneficial. “Our only problem is that the docket is very underutilized,” the chief justice said.

    Business courts are also known to attract business to their jurisdictions, since business owners seek business environments with more predictability.

    For instance, a large percentage of publicly traded U.S. companies incorporate in Delaware. A significant draw is the Delaware Court of Chancery, known as a preeminent forum for the resolution of complex corporate matters.

    Brenner said that as the Business Court continues to develop a body of law at the circuit court level, practitioners will have more insight on how certain matters may be decided.

    “As the Business Court publishes decisions, it helps because you don’t have to argue something again,” she said. “You get insight on how this is going to go. It makes the process more efficient and litigants have more confidence they’ll get a fair shake.”

    What’s Next for the Business Court?

    The Wisconsin Supreme Court established the Business Court Pilot Project by order in 2017 and called on the Business Court Advisory Committee2 to submit progress reports.

    Another progress report was due by Dec. 1, 2019, with an expected recommendation on whether the Business Court Pilot Project should be continued and/or expanded.

    The progress report will include data points, including the views of judges and attorneys concerning the effectiveness and benefits of the pilot project and “recommendations concerning eligibility criteria for assignment of cases to the pilot project.”

    Judge Morrison said a forthcoming petition will ask the state supreme court to expand the Business Court Pilot Program to Dane and Milwaukee counties, as well as counties in the 10th Judicial Administrative District (Ashland, Barron, Bayfield, Burnett, Douglas, Chippewa, Dunn, Eau Claire, Polk, Rusk, Sawyer, St. Croix, and Washburn counties).

    He also said the goal is to expand the project in stages and have it running statewide by the end of next year.

    State of the Judiciary: Chief Justice Patience Roggensack’s Comments on the Business Court

    The commercial docket pilot project that I mentioned last year is on-going both in Waukesha County and in the 8th Judicial Administrative District. It has been very beneficial for business related parties who proceeded in Wisconsin's commercial dockets.

    The judges who handle these cases have business experience and an appreciation of the need for prompt intervention, early resolution and the large community impact that commercial disputes can have. Commercial cases typically take about 36 months to resolve in a normal docket. However, in the commercial docket many cases have been resolved in less than 12 months. We have had some super results because of the talent and commitment of our commercial docket judges.

    For example, a matter involving the Northland Hotel in Green Bay was filed in 6 Judge Atkinson's commercial docket in Brown County. Northland Hotel opened in March of 1924 and once was referred to as the "crown jewel of Green Bay."

    However, it had fallen on hard times, and efforts to turn things around by creating a boutique hotel were having problems. The hotel ended up before a receiver. Undue delays could have sunk Northland Hotel for good. But, not to worry, Judge Atkinson was right there providing timely decisions so that a stall in our courts did not end up overwhelming restoration efforts. His attention made the difference. The Northland Hotel is once again open and a truly beautiful hotel, a jewel for Green Bay. The litigants have been appreciative of the knowledge and prompt attention of the business court judges, the judges' understanding of the importance of scheduling, of promptly holding temporary injunction hearings and of regular status conferences to keep cases on track. Our only problem is that the docket is very underutilized.

    Members of the business court team are working with the State Bar to present a program at the State Bar's annual meeting. We hope the program will raise lawyer awareness of the opportunity to choose a commercial docket for their business-related cases.

    In addition, we are doing training with our clerks of court to gain their assistance in recognizing the types of cases that should be assigned to commercial dockets. The commercial docket is a mandatory docket in Waukesha County and District 8; however permissive transfers from any other venue are permitted by petition.

    We appreciate the excellent work of judges who staff the pilot project and their judicial colleagues who have recognized when a case should have been filed in a commercial docket, and make the necessary referral. We are considering expanding mandatory commercial dockets into other counties. If there are judges who have an interest in participating, please contact Judge Jim Morrison.

    Endnotes

    1 Hon. Michael Aprahamian, The Need for Speed: Commercial Court Open for Business, Wis. Lawyer (Jan. 2018).

    2 The Business Court Advisory Committee is comprised of Judge James Morrison, Marinette County, Chief Judge of the Eighth Judicial District; Judge Michael Fitzpatrick, formerly on the Rock County Circuit Court and now on the Wisconsin Court of Appeals; Laura Brenner, Reinhart Boerner Van Deuren s.c., Nora Gierke, Gierke Frank Noorlander LLC, and Lon Roberts of Ruder Ware L.L.S.C. It is chaired by John Rothstein, Quarles & Brady LLP.




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